Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Joined: Dec 07, 2004 Posts: 483 Location: Cheshire, England
Posted: Sat May 21, 2005 3:34 am Post subject:
MD wrote:
What are the economic factors that would tend to soften the problems created by the coincidence of oil schock and debt ratio in the US economy?
Nice try
I think I've made my point.
Lets agree to disagree. You see back and white, I see grey scales. We have differing views of the world and that's fine. I doubt anything I could write would change your view, and I'm damn sure nothing you could say would change mine.
Joined: May 02, 2005 Posts: 3542 Location: On the ball
Posted: Sat May 21, 2005 11:00 am Post subject:
spot5050 wrote:
MD wrote:
What are the economic factors that would tend to soften the problems created by the coincidence of oil schock and debt ratio in the US economy?
Nice try
I think I've made my point.
Lets agree to disagree. You see back and white, I see grey scales. We have differing views of the world and that's fine. I doubt anything I could write would change your view, and I'm damn sure nothing you could say would change mine.
I am not sure what we are agreeing to disagree about, but no problem.
I am looking for economic discussion which unfortunately in this thread turned into a semantics debate over use of word choice and analogy which completely missed the original intent. It's time for me to abandon this one. _________________ "It's still all about energy!"
Joined: Dec 07, 2004 Posts: 483 Location: Cheshire, England
Posted: Sun May 22, 2005 11:16 am Post subject:
MD wrote:
I am looking for economic discussion...
Utter tripe. Self delusion of the highest order.
Read your own OP...
MD wrote:
Oil is the Fuse, Debt Bubble is the Bomb..and the US Economy is the target.
It appears that one moderate oil shock from the disruption of several hundred million barrels of oil could trigger the implosion of the US economy.
That is my strictly intuitive conclusion based on casual research over the past few months.
Opinions?
You don't want any dicussion, you've already made up your mind. You're seeking out people who agree with your viewpoint. You are seeking peak oil mutual masturbation. Well you're in the perfect place. Enjoy yourself
Joined: May 20, 2005 Posts: 204 Location: Austin, Tx
Posted: Sun May 22, 2005 11:41 am Post subject:
spot5050 wrote:
MD wrote:
I am looking for economic discussion...
Utter tripe. Self delusion of the highest order.
Read your own OP...
MD wrote:
Oil is the Fuse, Debt Bubble is the Bomb..and the US Economy is the target.
It appears that one moderate oil shock from the disruption of several hundred million barrels of oil could trigger the implosion of the US economy.
That is my strictly intuitive conclusion based on casual research over the past few months.
Opinions?
You don't want any dicussion, you've already made up your mind. You're seeking out people who agree with your viewpoint. You are seeking peak oil mutual masturbation. Well you're in the perfect place. Enjoy yourself
Ummmm, he posed a legit question: the US is carrying too much debt (both individual and government debt), what will happen if there is a gap between oil supplies and demand?
The first proposition is not in question--the US has an obscene amount of debt and I don't think any economist thinks it is structurally sound or tenable. There will be corrections, with or without oil shock.
The question--what will be the effect of an oil shortage in such an economic climate--is perfectly reasonable. Instead of making smug proclamations about why MD's word choice is incorrect you could actually enlighten us as to why the question, and the proposition of unsound debt that it depends on, are absurd.
Joined: Dec 07, 2004 Posts: 483 Location: Cheshire, England
Posted: Sun May 22, 2005 1:05 pm Post subject:
RG73 wrote:
Instead of making smug proclamations about why MD's word choice is incorrect you could actually enlighten us as to why the question, and the proposition of unsound debt that it depends on, are absurd.
What is "unsound debt"?!
Only on PO.com can you get away with making such ridiculous statements without anyone questioning you. What are unsound debts? Unsound debts - a concept unheard of previously, but presented here as fact, and not questioned by anyone. PO.com is weird. Weird weird weird.
In the weird world of po.com, if you dare say anything positive, you get ripped to shreds; but say something negative, no matter how ridiculous, and noone bats an eyelid.
<rant mode off>
It's interesting that it looks as if po will occur at approximately the same time as peak-debt. When we look back at the peak from a post-peak viewpoint, maybe the coincidence of the debt-peak and oil-peak will have seemed predictable; like we should have seen them both coming.
Logically it makes sense that post-peak, debt will fall. The higher interest rates are, the less people want to borrow. As oil gets more expensive, prices of everything go up, ie. inflation goes up, so the central banks raise interest rates to control their money supplies. So almost by definition, does po mean peak-debt.
Joined: Oct 14, 2004 Posts: 1203 Location: Left the cult
Posted: Sun May 22, 2005 1:24 pm Post subject:
spot5050 wrote:
What is "unsound debt"?!
Only on PO.com can you get away with making such ridiculous statements without anyone questioning you. What are unsound debts? Unsound debts - a concept unheard of previously, but presented here as fact, and not questioned by anyone. PO.com is weird. Weird weird weird.
I feel compelled to point out that a) you disproved your own point and b) "unsound debt", where unsound means bad, is really quite a common term, and any number of encylopedia type things can provide a quick definition, e.g.
Quote:
Bad debt
From Wikipedia, the free encyclopedia.
In accounting and finance, bad debt is the portion of receivables that can no longer be collected, typically from accounts receivable or loans. Bad debt in accounting is considered an expense.
I generally find PO.com is fairly sensible, it just has some people who make weird posts. _________________ It's all downhill from here
Joined: Dec 07, 2004 Posts: 483 Location: Cheshire, England
Posted: Sun May 22, 2005 1:50 pm Post subject:
bobcousins wrote:
Bad debt
From Wikipedia, the free encyclopedia.
In accounting and finance, bad debt is the portion of receivables that can no longer be collected, typically from accounts receivable or loans. Bad debt in accounting is considered an expense.
Clever bobc can use the internet. Cut/paste. Whooo.
Joined: May 02, 2005 Posts: 3542 Location: On the ball
Posted: Sun May 22, 2005 5:30 pm Post subject:
spot5050 wrote:
MD wrote:
I am looking for economic discussion...
Utter tripe. Self delusion of the highest order.
Read your own OP...
MD wrote:
Oil is the Fuse, Debt Bubble is the Bomb..and the US Economy is the target.
It appears that one moderate oil shock from the disruption of several hundred million barrels of oil could trigger the implosion of the US economy.
That is my strictly intuitive conclusion based on casual research over the past few months.
Opinions?
You don't want any dicussion, you've already made up your mind. You're seeking out people who agree with your viewpoint. You are seeking peak oil mutual masturbation. Well you're in the perfect place. Enjoy yourself
Since you deem yourself qualified to speak for both of us, there is no point in further comment from my end. _________________ "It's still all about energy!"
It's interesting that it looks as if po will occur at approximately the same time as peak-debt. When we look back at the peak from a post-peak viewpoint, maybe the coincidence of the debt-peak and oil-peak will have seemed predictable; like we should have seen them both coming.
Logically it makes sense that post-peak, debt will fall. The higher interest rates are, the less people want to borrow. As oil gets more expensive, prices of everything go up, ie. inflation goes up, so the central banks raise interest rates to control their money supplies. So almost by definition, does po mean peak-debt.
I suspect that you do not understand what our current Money is and how it is created. In the UK only 3% of money in circulation is cash which is non-interest-bearing.
The other 97% in circulation is loaned into existence by "Credit Institutions" ie Banks or Building Societies and two third of this came into existence as mortgage loans. Unfortunately, when Credit Institutions create this Money they do not create the necessary credit/money to pay the interest on it.
Which is why Money and Debt (two sides of the same coin) increases exponentially: why we are driven to "Economic Growth " regardless of the effect on the planet - and why there can be no such thing as Peak Debt unless we are able to create a form of non-interest bearing Money with which interest-bearing debt/money may be repaid.
I suspect that you do not understand what our current Money is and how it is created. In the UK only 3% of money in circulation is cash which is non-interest-bearing.
The other 97% in circulation is loaned into existence by "Credit Institutions" ie Banks or Building Societies and two third of this came into existence as mortgage loans. Unfortunately, when Credit Institutions create this Money they do not create the necessary credit/money to pay the interest on it.
Which is why Money and Debt (two sides of the same coin) increases exponentially: why we are driven to "Economic Growth " regardless of the effect on the planet - and why there can be no such thing as Peak Debt unless we are able to create a form of non-interest bearing Money with which interest-bearing debt/money may be repaid.
This is wrong and I'm tired of seeing it repeated around this forum. Interest existed during the middle ages, when the economy certainly wasn't expanding exponentially. Interest is just a trade between two people. Picture that money is just a claim on work. One person trades a certain amount of work in the present in exchange for a larger amount of work in the future. There's no need for the total amount of work done to increase, since the person borrowing work sacrifices the fruit of some future work to pay back the debt.
In a Robinson Crusoe economy, Friday may agree to help Robinson build up his shack for an entire day in exchange for Robinson helping him fish every day for an hour for a year. There's no growth in the economy possible in this scenario, but interest still exists.
Joined: May 22, 2004 Posts: 1437 Location: Ottawa, Ontario
Posted: Tue May 24, 2005 3:56 pm Post subject:
I'll just jump in here and agree with jaws. I'm tired of that fallacy being repeated as well. I wonder, why is it so darn popular in these forums. Where exactly do you guys pick up this meme? Is it from Heinberg or do you get infected only once you start reading about this idea on PO.com? _________________ Biofuels: The "What else we got to burn?" answer to peak oil.
Joined: Oct 04, 2004 Posts: 5709 Location: Body in OK, Heart in TX
Posted: Tue May 24, 2005 4:19 pm Post subject:
nero wrote:
I'll just jump in here and agree with jaws. I'm tired of that fallacy being repeated as well. I wonder, why is it so darn popular in these forums. Where exactly do you guys pick up this meme? Is it from Heinberg or do you get infected only once you start reading about this idea on PO.com?
Isn't it the fact that the money is loaned into existence, not simply the interest, that causes the growth requirement?
(please don't hit me, guys, I'm totally baffled by all this finance voodoo and just trying to understand)
Instead of making smug proclamations about why MD's word choice is incorrect you could actually enlighten us as to why the question, and the proposition of unsound debt that it depends on, are absurd.
What is "unsound debt"?!
Only on PO.com can you get away with making such ridiculous statements without anyone questioning you. What are unsound debts? Unsound debts - a concept unheard of previously, but presented here as fact, and not questioned by anyone. PO.com is weird. Weird weird weird.
In the weird world of po.com, if you dare say anything positive, you get ripped to shreds; but say something negative, no matter how ridiculous, and noone bats an eyelid.
<rant mode off>
It's interesting that it looks as if po will occur at approximately the same time as peak-debt. When we look back at the peak from a post-peak viewpoint, maybe the coincidence of the debt-peak and oil-peak will have seemed predictable; like we should have seen them both coming.
Logically it makes sense that post-peak, debt will fall. The higher interest rates are, the less people want to borrow. As oil gets more expensive, prices of everything go up, ie. inflation goes up, so the central banks raise interest rates to control their money supplies. So almost by definition, does po mean peak-debt.
What is "peak debt"? Only on Peak oil would you hear such utter nonsense. How can debts peak? If we're dealing in a world of abstractions here, why use terms that infer a tangible correlation? The insipient use of a shared division of labour juxtaposed within the contextual framework of a capitalist traditional modality presupposes an axis point of immense proportions.
Joined: May 22, 2004 Posts: 1437 Location: Ottawa, Ontario
Posted: Tue May 24, 2005 7:00 pm Post subject:
Quote:
Isn't it the fact that the money is loaned into existence, not simply the interest, that causes the growth requirement?
(please don't hit me, guys, I'm totally baffled by all this finance voodoo and just trying to understand)
I think the argument goes something like this:
1.The fractional reserve banking system creates money by providing a loan to an individual.
2.That individual then has to pay not only the principal but also the interest on the loan.
3. Since only the principal money was created the debtor does not have enough money to pay back the loan + interest.
4. To avoid bankruptcy the individual is forced to take another loan to get the money to pay the interest
5. But now he doesn't have any money to pay the interest and principal from the second loan, a new (bigger) loan is required.
6. It is clear at this point there is no way for the poor sap to ever repay the interest and the debt will just keep on growing bigger and bigger.
Have I got it right? I think this is all rubish but hopefully I understand what I'm rubishing.
(Note: the problem with this scenario is that it forgets to mention that the bank spends the interest it receives on the loan buying services from the individual who took out the loan, therefore there is no need for him to take out the second loan to pay off the interest on the original debt.) _________________ Biofuels: The "What else we got to burn?" answer to peak oil.
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